Adhesive Backed Materials Ltd |
Notes to the Accounts |
for the year ended 31 August 2017 |
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1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Intangible fixed assets |
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Intangible fixed assets are measured at cost less accumulative amortisation and any accumulative impairment losses. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Plant and machinery |
25% reducing balance |
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Fixtures and Fittings |
25% reducing balance |
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Computer equipment |
25% reducing balance |
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Investments |
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Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
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Stocks |
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Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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2 |
Employees |
2017 |
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2016 |
Number |
Number |
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Average number of persons employed by the company |
8 |
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8 |
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3 |
Tangible fixed assets |
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Fixtures, fittings and computer equipment |
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Plant and machinery etc |
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Total |
£ |
£ |
£ |
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Cost |
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At 1 September 2016 |
24,974 |
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127,444 |
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152,418 |
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Additions |
4,107 |
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- |
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4,107 |
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Disposals |
(107) |
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- |
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(107) |
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At 31 August 2017 |
28,974 |
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127,444 |
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156,418 |
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Depreciation |
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At 1 September 2016 |
16,570 |
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104,308 |
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120,878 |
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Charge for the year |
3,113 |
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5,784 |
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8,897 |
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On disposals |
(47) |
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- |
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(47) |
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At 31 August 2017 |
19,636 |
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110,092 |
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129,728 |
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Net book value |
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At 31 August 2017 |
9,338 |
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17,352 |
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26,690 |
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At 31 August 2016 |
8,404 |
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23,136 |
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31,540 |
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4 |
Debtors |
2017 |
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2016 |
£ |
£ |
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Trade debtors |
71,702 |
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78,072 |
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Other debtors |
4,240 |
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2,391 |
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75,942 |
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80,463 |
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5 |
Creditors: amounts falling due within one year |
2017 |
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2016 |
£ |
£ |
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Bank loans and overdrafts |
12,144 |
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29,894 |
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Obligations under finance lease and hire purchase contracts |
2,229 |
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3,998 |
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Trade creditors |
44,449 |
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37,401 |
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Directors' current account |
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192 |
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4,104 |
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Taxation and social security costs |
17,559 |
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18,893 |
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Other creditors |
4,358 |
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3,242 |
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80,931 |
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97,532 |
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The bank overdraft facility is secured by a Fixed and Floating Charge over the company assets and by a personal guarantee by company director Gareth Bowden. The Funding Circle loan is secured by a personal guaranteed by company director Gareth Bowden. |
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6 |
Creditors: amounts falling due after one year |
2017 |
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2016 |
£ |
£ |
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Bank loans |
8,399 |
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12,428 |
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Obligations under finance lease and hire purchase contracts |
- |
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2,229 |
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Loan from Family Member |
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31,540 |
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33,266 |
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39,939 |
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47,923 |
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The family loan is a loan from Mr Cyril Bowden who is the father of company director, Gareth Bowden. It is a long term loan without any terms and conditions. |
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The loan has been used to fund new machinery, the move to large premises including the related moving costs and advertising to achieve a strong position with a view towards long term rather than short term profitability. During the year repayments totalling £1,726.16 were made to Mr Cyril Bowden. |
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7 |
Related party transactions |
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Jade Bowden |
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Jade Bowden is the Wife of company director Gareth Bowden. |
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During the year wages and pension costs totalling £1,975.45 (2016: £5,369.92) were incurred in relation to Jade Bowden as an employee of Adhesive Backed Materials Ltd. |
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Cyril Bowden |
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Cyril Bowden is the Father of company director Gareth Bowden. |
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During the year wages costs totalling £8,646 were incurred in relation to Cyril Bowden as an employee of Adhesive Backed Materials Ltd. |
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Ethan Bowden |
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Ethan Bowden is the Son of company director Gareth Bowden. |
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During the year wages costs totalling £891.00 were incurred in relation to Ethan Bowden as an employee of Adhesive Backed Materials Ltd. |
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8 |
Transactions with directors |
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During the year all directors used a current account with the company to record amounts due to them and amounts drawn by them. The amounts are repayable on demand and do not carry interest. As at 31st August 2017 director, Gareth Bowden's account was overdrawn by £502.66. As at 31st August 2016 the accounts showed an amount of £3,995.77 owing back to Gareth Bowden as a director. The accounts show an amount owing back to Paul Stevens as a director as at 31st August 2017 of £192.00 (2016: £108.00). |
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9 |
Controlling party |
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Mr Gareth Bowden holds 66.6% of the share capital of the company. As Mr Gareth Bowden works full time in the business and controls the daily running of the company, he is actually the company's ultimate controlling party. |
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10 |
Other information |
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Adhesive Backed Materials Ltd is a private company limited by shares and incorporated in England and Wales. Its registered office is: |
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Crown Business Park |
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Tredegar |
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Gwent |
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NP22 4EF |